American law schools in crisis

Focus on students is the only way for non-elite schools to survive

June 04, 2012|By Phillip J. Closius

The Golden Age of American legal education is dead.

Every law dean knows it, but only some of them will feel it. Elite schools (the top 25 in U.S. News & World Report's rankings) and the 43 non-elite state "flagship" law schools are almost immune to market pressures. Those at risk will come from the other 132 law schools — the ones that produce the majority of law graduates.

Law schools have increased tuition drastically for almost 20 years, beginning in the 1990s when universities refused to continue subsidizing the affordable public law schools. Annual tuition increases, previously modest, moved into the double-digit range to eliminate deficits. Despite predictions of doom, these increases were absorbed because the dot-com and Bush-inflated economies boosted the legal job market. Cheap credit was also unexpectedly available to all, supported in recent years by government backing. Existing schools expanded enrollments, and new law schools opened as revenue soared. Applicants increased annually despite rising tuition.

The number of applicants peaked in 2004 at 100,600. Shortly thereafter, career placement officers informed the deans that the average starting salary would no longer support the average annual debt service. Despite this warning, tuition continued to rise. Law schools — and, increasingly, their universities — were hooked on the revenue stream. From 2000-2010, public law schools averaged a tuition increase of 160 percent for residents and 109 percent for nonresidents. Private law school tuition has kept pace.

The applicant market, however, did not ignore the job trend. The total applicant pool for the fall 2011 entering class was 78,900 — a decrease of 21,700 since the 2004 high. National projections are for an additional 15 percent decrease for the entering class of fall 2012.

Law schools will not lower tuition. The elite and flagship schools have no incentive to do so. Presidents of other schools, who see the higher-rated schools increasing tuition, won't voluntarily decrease their own revenue. Budgets are difficult to cut because they mainly consist of compensation and law libraries. Universities dislike layoffs, and the competitive market for talented people prevents a dean from lowering starting salaries.

Jobs and tuition, then, become an issue of quality admits. The fall 2010 entering class actually increased to a new high of 49,700, even as the job market was falling. Schools must now choose between admitting smaller entering classes (and sacrificing revenue) or dealing with a decline in the quality of their students — or both. If the applicant pool declines by an average of 11 percent over the next four years, law schools will be accepting virtually every applicant for the class of August 2015 or miss their enrollment targets. Plunging student credentials create a spiral of decline as a school's reputation suffers, job prospects worsen, bar passage rates fall and more students transfer. Each dean hopes that other schools will drop faster in the U.S. News rankings.

Law schools in crisis must become student-centric. Faculties are mainly interested in curriculum, publication and their teaching schedule. Presidents are focused on revenue. Deans, selected by these two groups, normally share these priorities. The things that matter to students — admissions, career services, tuition and budget, bar passage, transparency and teaching quality — are frequently ignored or delegated to staff. This paradigm, derived from the elite/flagships, will no longer work for the schools facing a radically different market. Their deans must have CEO skills informed by academic values and be actively championing student priorities.

Pre-2007, law students did not require much institutional support to find jobs. In today's depressed environment, resumes must be reviewed, mock interviews mandated and realistic job searches ensured. Not every alumnus can donate $1 million, but all can help a student get an internship or job. The dean, faculty and staff must also visit potential employers. Concurrently, admission credentials will rise if the dean conveys a passionate vision to prospective students and the school increases its investment in scholarships. Good, satisfied students are a school's best asset in recruiting better students. As admissions credentials increase, rankings go up. As both of these occur, more employers will consider students for internships and jobs. These efforts won't transform a down market, but they will make a particular school's students more competitive.